Rutland Daily Herald from Rutland, Vermont • 11

11 RUTLAND DAILY HERALD, TUESDAY MORNING, JUNE 14, 1983 Senate Committee Probing Vermonts Tax System By JACK HOFFMAN Vermont Preu Bureau MONTPELIER The Senate Finance Committee began its review of Vermonts tax system Monday. As the result of Vermont mer. The Senate committee, taking the longer view, is looking at possible reform of the state's tax structure. The House committee has assumed responsibility for performance of some of the states revenue sources, the House Ways and Means and Senate Finance committees have undertaken two separate studies this sum federal tax, the Miller formula for calculating state aid to education was developed, and Vermont passed a sales fax, although not until 1970. Gibb declined to speculate on whether this study would produce equally dramatic changes in the tax structure.

However, he did note that in 1967 the committee found a similar situation that is, that was low on sales (taxes) and high on income (taxes)" compared to other states. Sanders Unveils Budget With Major Increases the state. Welch asked the Joint Fiscal Office to prepare an analysis of just where the tax burden is falling on various income brackets. Welch said he suspects that because of new deductions and exemptions approved at the federal level, people in the higher tax brackets may not be carrying the same tax burden as they were a few years ago. That and other additional information will be gathered for the committee to study this summer.

It is too early at this stage to get an idea of what kind of reorganization of the tax structure, if any, the committee plans to recommend. Gibb pointed out, however, that the last time the Legislature undertook such a comprehensive review of the system some dramatic changes resulted. Gibb was the head of that tax study committee in 1967- As a resulLjpf that study, Vermont piggybacked the state tax to the finding short-term solutions to Vermonts deficit. The Finance Committees immediate task is to get a handle on where Vermont gets its money now and how it stands in relation to other states. Some of the information they received Monday from the Joint Fiscal Office simply confirmed what the four senators knew: that Vermont taxes itself heavily in all but the sales tax.

Except in the sales tax, every Vermont tax effort is exceeding capacity, said Ronald Crisman, head of the Legislature's Joint Fiscal Office. Crisman cited a study prepared by the Advisory Commission on I n-tergovernmental Relations, which compares the states ability to generate taxes and their efforts to raise revenue through various taxes. With 100 being the average, Vermont was found to have a tax effort of 110 and a tax capacity of 92. In other words, Vermont, New Hampshire gets 3.5 percent of its tax money from the personal income tax, Massachusetts 45.1 percent, Maine 20.3 percent, and New York 43.3 percent. John Flyter of the Joint Fiscal Office pointed out to the committee that while Vermont is heavily dependent on the income tax, it has taken steps to lessen the burden for those on the low end of the scale.

When the states various rebates and exempts are taken into account, -he explained, Vermonts income tax structure is quite progressive that is, the burden falls more heavily on those in the higher income brackets. Sen. Peter F. Welch, D-Windsor, questioned whether that was still true in light of tax law changes that have occurred during the Reagan administration. Because Vermonts personal income tax is piggybacked to the federaliax, any changes in the federal tax code are carried over to compared to the other states, squeezes more blood out of a smaller stone.

Looking at the taxes individually, effort far exceeded capacity with the personal income tax. But with the sales tax, Vermont's effort was far below its capacity. The study, which was released in 1982, covers the period from 1967 to 1979. The study reinforced what some legislators have known about Vermonts tax structure. There are a lot of states that dont make near the use of the Income tax as we do, said Sen.

Arthur Gibb, R-Addison, who is chairman of the Senate Finance Committee. Another report Crisman had showed that Vermont ranks 16th in dependence on the personal income tax to generate money. According to a study by the National Conference of State Legislatures, the personal income tax accounts for 31.2 percent of the taxes raised in Vermont. law! $980,000 for operating expenses. About $100,000 was budgeted for community projects which grew in funding by 25 percent over last year.

Some of the projects budgeted out of revenue sharing funds include dental clinics at $7,000, recreation programs for the elderly at $5,000, plus $11,000 for the Champlain Valley Area Agency on Aging, $6,000 for a young employment program, and $3,000 for the Women's Rape Crisis Center. $480,000 In revenues from the McNeil generating station. The low inflation rate also helped, he said. But he cautioned Burlingtons rosy financial outlook won't stay that way in future years unless there are major reorganizations of city departments to streamline operations. If inflation rises, he said, the city most likely will not be able to increase real funding for city departments next year.

Of $1.08 million in federal revenue sharing funds, the mayor this year budgeted (RwwlioiiAviiilbk i i II! Cwaaaj wvnolm tomccocommv 17 mg. 1.3 mg. nicotine av. per cigarette by FTC method. IFIIMFIIE Discover the taste of Camel Filters, now in a Hard Pack.

By DEBBIE BOOKCHIN BURLINGTON Mayor Bernard Sanders Monday unveiled a $14.7 million operating budget that includes major increases for the police department, library and a complete overhaul of the city salary system. The operating budget reflects increased revenues and is up more than $2 million from last years operating budget of about $12.6 million. In addition to the operating budget, Sanders proposed a $1.7 million capital improvements budget for first time construction and restoration projects. This is one of the most exciting budgets in a ion time, Sanders tol aldermen as the 70-page document was distributed. At a time when the federal government is making major cuts, the City of Burlington will not turn its back on the poor and those people in need of help, Sanders said.

The Sanders budget includes a 10-cent reduction in the city debt service. During the last cam-' paign, Sanders promised voters a 10-cent reduction in property taxes. But taxpayers will only see a real reduction of 2 cents because the school department has budgeted a 5-cent increase and the city retirement fund has requested a 3-cent increase. Sanders would have had to cut $69,000 out of other areas of the budget to compensate for the 3-cent increase requested by the retirement fund. There has been a 10-cent decrease in terms of items the mayor controls, said City Treasurer Jonathan Leopold Jr.

Aldermen must approve a budget by the last day in June, according to the City Charter. The budget also distributes $1.1 million in Community Development Block Grant funds among a variety of community programs. One of the most innovative proposals calls for a $90,000 expenditure allocating $15,000 to the neighborhood planning assemblies in the citys six wards. Residents in each ward will be able to decide on their own how the money is spent. Another proposal sets aside $250,000 in block grant funds for a small business revolving loan fund that would be used as venture capital for businesses starting in Burlington.

Under the mayors proposal, the city would require one Burlington resident be hired for every $6,000 loaned by the city. The new Community Development Block Grant set aside $210,000 for housing rehabilitation, $15,000 for renovations to the Community Health Center, Burlington's neighborhood clinic, $33,203 to help complete the city's bike path and $60,000 for a day-care center in the Memorial Auditorium. Major capital improvements will include $500,000 for repairing city streets and sidewalks, $25,000 for restoration of the Ethan Allen tower, $135,000 for fire department capital improvements, $50,000 for five new police cars and $100,000 for repairs and im-provements of the Memorial Auditorium. The Lakeside underpass, which connects Burlingtons lakeside neighborhood with the rest of the city, also will be improved to the tune of $130,000. Some of Sanders capital improvements made use of about $1.2 million of a $2 million surplus fund left over from past years.

About $800,000 will rem ain. Leopold said the city was able to increase the budgets of most departments an average of 4 to 5 percent over inflation. The treasurer said the city was able to do this because of increased nontax revenues and payments in lieu of taxes, such as.